Medicare, Individual Mandate Stir Debate

Medicare is speeding toward insolvency five years faster than the Trustees reported just a year ago, and the program is now facing $38 trillion in red ink.

Chief Medicare Actuary Richard S. Foster said in a supplementary report that under current law Medicare is on track to pay providers less than Medicaid does, and this would lead to “severe problems with beneficiary access to care.”

Medicare simply can’t be sustained as it is. And just when we could have had a serious conversation about progress on real reform, former House Speaker Newt Gingrich torpedoed the debate — and the Ryan plan — with his comments on Meet the Press last Sunday. “I don’t think right-wing social engineering is any more desirable than left-wing social engineering,” Gingrich said. “I don’t think imposing radical change from the right or the left is a very good way for a free society to operate.”

One citizen confronted him in Iowa saying: “Speaker Gingrich, what you just did to Paul Ryan is unforgivable.”

The fact that reaction against him was so strong and swift — that Newt had to apologize to Budget Chairman Paul Ryan — indicates to me that the American people are ready for a serious conversation. Ryan is scheduled to be on Meet the Press this weekend, and Newt is going to be on Face the Nation. Do stay tuned.

Meanwhile the Obama administration’s position continues to be to pretend that they are going to protect Medicare as it is. They are sticking their heads in the sand and denying that 1) they have proposed taking $575 billion out of the program to pay for two new ObamaCare entitlement programs; 2) they are putting an unelected, unaccountable rationing board in place — IPAB — to cut Medicare payments further, and the president wants to double-down on these “savings.”

Medicare is unsustainable with 77 million baby boomers hitting the program. The changes that President Obama has led will mean draconian cuts in payments to providers and access to care, turning the program into a mirror image of the worst health coverage program in the country today — Medicaid. Medicaid pays doctors so little few of them can afford to see patients, rationing care by forcing them to wait in hospital emergency rooms for even routine care. Oh, and by the way, ObamaCare shoves another 25 million people into Medicaid’s rolls, surely tearing the safety net to shreds and likely bankrupting the states in the process.

Medicare is going to be changed, one way or the other, as I wrote about in a commentary this week:

Not changing Medicare is not an option. Yet the prevailing wish appears to be that politicians will simply leave Medicare alone.

But without a serious course adjustment, the program faces a steep and inevitable decline. Medicare will become a third-rate, price-controlled program that rations a lower-quality of care through waiting lines and other restrictions.

If Medicare’s antiquated, open-ended, fee-for-service model isn’t reformed, then we will continue to pour deficit-funded dollars into the program or raise taxes to levels that would topple the economy as millions of baby boomers hit retirement.

We must have an adult conversation about this, and the American people, scared to death about the growth in the size of government and a tsunami of red ink from entitlement spending, appear to be ready to listen.

Individual mandate firestorm: The other part of the speaker’s comments that set off a firestorm involved his support for an individual mandate. “I believe all of us — and this is going to be a big debate — I believe all of us have a responsibility to help pay for health care,” he said, reiterating his earlier support for a mandate.

This comes on the heels last week of former Massachusetts Gov. Mitt Romney’s defense of the individual mandate as right for the residents of Massachusetts in RomneyCare but very wrong for the whole country in ObamaCare. Here’s my National Reviewpiece on this.

A cascade of government control results from individual mandates, whether imposed by states or the federal government. First, the government has to decide what qualifies as “acceptable” insurance that will satisfy its mandate. And that leads to political determinations about what must be covered, taking control away from individuals and businesses. The individual mandate inevitably leads to an employer mandate to make sure businesses are locked into paying for coverage.

Then the government needs to figure out how to help people buy and pay for this expensive new insurance. And that leads to exchanges, to vast new entitlement programs, and government intrusion into our household earnings so it can determine whether we are qualified for subsidies. And that leads to the whole panoply of government programs to micromanage this new system that government is now in charge of running and paying for since basic market forces have been demolished.

The starting point for virtually everything we write about in our book, Why ObamaCare Is Wrong for America, is the individual mandate. You really need to get this book if you haven’t already to arm yourself for the debates yet to come.

Finally, this nugget about waivers: In a bizarre, near-admission that the so called “Affordable Care Act” is anything but, the White House issued a blog post this week defending itself for issuing waivers “from the annual limit provision of the law if it would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage.” So far, 1,372 waivers have been granted.

It turns out that one in five of the latest batch of waivers were to businesses in former Speaker Nancy Pelosi’s district in San Francisco. Read more from Michelle Malkin’s latest column.

But there’s more: HHS on Thursday issued regulations explaining that it will have to justify to the federal government any health insurance premium rate increases over 10 percent. That comes at a time when insurers are being required to cover preventive care with no cost-sharing by beneficiaries, increase the coverage limits on policies, and comply with a growing list of other federal mandates. Karen Ignagni, president of America’s Health Insurance Plans, said: “Focusing on health insurance premiums while ignoring underlying medical cost drivers will not make health care coverage more affordable for families and employers.”

But the rules include an interesting exemption that has received little attention. The requirements for federal review of premium increases exempt one special class of Medicare supplemental insurance policies.

Let’s take a guess who is the top marketer of these so-called Medigap policies. Surprise, surprise! It’s the AARP, which spent millions of dollars helping to get ObamaCare passed. That same AARP that makes upwards of $1 billion in profits from marketing Medigap policies.

Two more examples of crony capitalism — if you toe the line we’ll protect you — that the American people found so disgusting when ObamaCare was passed and that only gets worse as they try to implement this monstrosity!

CLIP OF THE WEEK

Grace-Marie Turner on FOX Business

In this video, Grace-Marie Turner argues that RomneyCare won’t work on a nationwide scale. Watch now >>

GALEN IN THE NEWS

Sweeping Overhaul Will Save Medicare

Grace-Marie Turner
The Sacramento Bee, 05/19/11

The escalating political debate about the future of Medicare reveals a fear of change coupled with the growing recognition that change is essential to sustain the program for the future. House Budget Chairman Paul Ryan recognizes that reality in his proposal to begin modernizing the program, starting 10 years from now. He wants the next generation of seniors to have more choices and lower costs through competition. They would get guaranteed private coverage through a modernized Medicare program that works much like the health program members of Congress have today. Voters face a clear choice. Do we want to continue down a path of price controls, restrictions on access and government-rationed health care? Or do we want to modernize Medicare — and save it — so seniors have the security of access to care and choices of coverage with competition driving costs down?

Stalling the Engine of Economic Recovery

Grace-Marie Turner
RealClearMarkets, 05/13/11

As America struggles to get people back to work after the deep recession, the best strategy is to focus on unleashing those industries most primed to create high-quality jobs, to innovate, and to strengthen our manufacturing sector so we can boost exports. President Obama apparently disagrees. The pharmaceutical industry fits the description of an industry ready to contribute to U.S. recovery, yet the president is proposing policies that will impede the industry’s ability to do what it does best – innovate, generate big profits for shareholders, and create jobs in the process. He wants to make it more difficult for the industry to invest in cutting-edge medicines, and he also wants to replace industry-driven research with government-run research. This will stifle innovation, hinder job growth, and delay life-saving treatments in reaching the market.

America’s Small Business Summit 2011
U.S. Chamber of Commerce Event
May 23-25, 2011
Washington, DC
Grace-Marie Turner will participate in a debate on “Health Care a Year Later: Are You Feeling Any Better?” at 2:15pm on Monday, May 23.